72 Hour Call

72 Hour Call for June 8, 2011

Today’s Call: Yield on 10yr US Treasury bond to fall (price to rise).  Currently 2.962%.
Rationale: China warned today that a US default would be very harmful to many nations of the world, most of all China.  While we believe that the US will eventually default, in the short term this type of news should be traded against.  Short term safe haven buying will overwhelm any selling on this news.
Result of Call for June 3, 2011: Caterpillar (CAT) to fall.  Was $101.10, Currently $97.91.  Good Call.
Calls to Date: Good Calls: 27, Bad Calls: 18, Batting .600

Key Indicators for Wednesday, June 8, 2011

FED Target Rate:  0.09% FED IN DESPERATION MODE!!!!
MINT Perceived Target Rate*:  2.25% INFLATION HERE WE COME!!!!

*See FED Perceived Economic Effect Rate Chart at bottom of blog.  This rate is the FED Target rate with a 39 month lag, representing the time it takes for the FED Target rate changes to affect the real economy.  This is a 39 months head start that the FED member banks have on the rest of us on using the new money that is created.